2002 EDITION Evolution of service statistics Proceedings of the seminar on "Service statistics within short-term business statistics" Luxembourg, February 2002 THEME 4 Industry, EUROPEAN trade and COMMISSION 4services A great deal of additional information on the European Union is available on the Internet. It can be accessed through the Europa server (http://europa.eu.int). Luxembourg: Office for Official Publications of the European Communities, 2002 ISBN 92-894-3415-5 © European Communities, 2002 TABLE OF CONTENTS INTRODUCTIONSER SERVICE STATISTICS WITHIN SHORT-TERM BUSINESS STATISTICS . 1 Gunter Schäfer SHORT-TERM STATISTICS ON SERVICES FOR THE EURO AREA . 5 Henning Ahnert and Stefano Nardelli European Central Bank ECONOMIC ANALYSIS OF SHORT-TERM DATA ON SERVICE SECTORS . 18 Gian Paolo Oneto and Federico Polidoro National Institute of Statistics, Italy EXPERIENCES WITH THE COLLECTION AND EDITING OF DATA INCLUDING THEIR PUBLICATION IN THE AREA OF TRADE STATISTICS . 26 Erwin Fida Directorate Business Statistics, Statistics Austria, Vienna COOPERATION BETWEEN SHORT-TERM STATISTICS AND QUARTERLY NATIONAL ACCOUNTS AT EUROSTAT ON SERVICES STATISTICS (EXCLUDING THE RETAIL TRADE) . 33 Frédéric Donzel Eurostat IMPACT OF THE USE OF ADMINISTRATIVE DATA AND NEW SURVEYS ON SHORT-TERM BUSINESS STATISTICS IN THE SERVICES SECTOR IN GERMANY . 39 Robin Lorenz and Dieter Schäfer Statistisches Bundesamt, Wiesbaden, Germany IMPLEMENTATION OF REGULAR SHORT-TERM STATISTICS ON SERVICES IN HUNGARY AND FUTURE EVOLUTION . 53 Szilárd Páll Hungarian Central Statistical Office, Services Statistics Department, Budapest, Hungary SHORT-TERM STATISTICS ON SERVICES IN FRANCE . 62 Magali Demotes-Mainard Département des Activités tertiaires, INSEE, France THE FUTURE OF SERVICE STATISTICS IN PORTUGAL . 70 António Daniel Santos and Humberto Jorge Pereira Instituto Nacional de Estatística (INE), Lisbon, Portugal AN OVERVIEW OF THE UK’S EXPERIMENTAL CONSTANT PRICE MONTHLY INDEX OF SERVICES . 78 Steve Drew Office for National Statistics, United Kingdom SERVICE STATISTICS WITHIN SHORT-TERM BUSINESS STATISTICS . 87 Franz-Josef Klein DEVELOPMENT OF THE CORPORATE SERVICES PRICE INDEX: An interim progress report produced for the Statistical Office of the European Community (Eurostat) . 96 Nick Palmer Corporate Services Price Index Branch, Office for National Statistics, UK DEVELOPMENT OF SERVICE PRICES IN STATISTICS SWEDEN — A SMALL COUNTRY’S EXPERIENCE . 111 Vera Norrman Prices, Economics Statistics, Statistics Sweden, Sweden EXPERIENCES OF CONDUCTING SURVEYS AT STATISTICS DENMARK Seminar on short-term statistics in Eurostat, March 2001 . 114 Bente Dyrberg Statistics Denmark ANNEX: DELEGATES LIST . 118 Introduction The Short-term Statistics (STS) Regulation introduced a wide range of indicators covering industry, construction, retail trade and services. It was innovative in covering service sectors for infra-annual statistics besides the more traditional producing and trading sectors. The STS Regulation foresees two quarterly indicators for services: 'turnover' and 'number of persons employed'. These two indicators provide some information on the volume of output and on labour input. However, the balance between industry and services for quantitative statistics is by far not achieved yet. For industry, a wide range of indicators, many of them on a monthly basis, has been available for a long time thus allowing detailed sectoral and causal analyses. Short-term service statistics have just recently been defined and the implementation in Member States is still going on. This imbalance is hardly adequate in view of the economic situation. Services constitute roughly 70% of the GDP of European Member States and available analysis shows that these services are indeed strongly influenced by economic cycles. Thus, detailed and timely knowledge of the evolution of services is an essential pre-requisite for economic and monetary policy making. This fact has been well recognised and has resulted in specific actions promoted by the Council of Ministers, ECOFIN as well as more operational decisions taken within the European Statistical System. This seminar provides a platform to discuss the current status of short-term service statistics and its potential future evolution. The various contributions and the ensuing discussion are also an important input for the work towards a revision of the Short-term Statistics Council Regulation planned to be concluded in 2003. The development of statistics for the service sector is a keyelement in that revision. Pedro Diaz-Muñoz SERVICE STATISTICS WITHIN SHORT-TERM BUSINESS STATISTICS Gunter Schäfer SUMMARY The Short-term Statistics Regulation covers a range of service statistics and requests quarterly indicators on turnover and the number of persons employed. The paper presents the coverage of the Regulation. It also conducts a first analysis of the data available to Eurostat. The critical question concerns the degree to which service sectors are business cycle sensitive. Although the data available to Eurostat is still very incomplete, some conclusions can already be drawn. 1. Introduction It is common knowledge that services are by now the dominating part of modern, post-industrial societies. The service sectors dominate both in size as well as in their growth rate compared to the 1 producing sectors as shown in a recent Eurostat publication . Size as share of Growth in value Sector value added in added in EU EU (in 2000) (in 2000) Agriculture 2.2% 0.1% Manufacturing 22.9% 4.0% Construction 5.3% 1.4% Trade, transport, communication 21.0% 3.9% Financial services, business activities 27.2% 4.9% Public services 21.4% 1.6% The high growth rates of the service sector of 2000 are no exception. They have been observed since a long time and economists have little doubt that this development will continue for some time in the future. The high importance of the service sector also means that it must not be ignored in the observation of the business cycle. Traditionally, the service sectors were treated with little priority by almost exclusively focusing on the producing sectors of industry and construction. The important question for the observation of the service sectors for the purpose of business cycle analysis is: Which of the service sectors are business cycle sensitive? If a large part of services would fall into this category, their observation could be of critical importance for economic and monetary analysis. Results from National Accounts indeed suggest that the outputs from the aggregates for market service categories move similarly to the movement of overall GDP. The non-market service sectors that are largely public service 1 Eurostat: Economic Portrait of the Union, 2000. 1 eurostat dominated show a much lower degree of volatility that could be attributed to business cycle 2 fluctuations . The creation of the European Monetary Union has lifted the need for a close observation of all factors that influence the business cycle onto a European scale. The Short-term Statistics Regulation (STS) is a key instrument for that purpose. Once fully implemented, STS will have a major role to play in providing data on short-term evolution of the service sector. Compared to national accounts, STS is going into sufficient detail to allow a judgement of individual service sectors. 3 The aim of this paper is to show some preliminary results from a recent investigation into the degree to which different service sectors are business cycle sensitive. 2. The short-term Statistics Council Regulation The short-term Statistics Regulation 1165/98 covers in its annex D a quite wide range of service statistics for the quarterly indicators of turnover and number of persons employed (according to NACE rev.1 classification): Number of persons Sector (NACE Rev.1) Turnover employed Division 50: Sale of motor - sum of 50.1, 50.3, 50.4 - 50 vehicles - 50.2 - 50.5 - Only 50 for small MS Division 51: Wholesale trade - 51 at 3 digit level - 51 - Only 51 for small MS Division 52: Retail Trade Treated in STS Regulation, Treated in STS Regulation, Annex C Annex C Division 55: Hotels and - 55 - 55 restaurants Section I: Transport, storage, - 60, 61, 62, 63 - 60, 61, 62, 63, 64 communication - 64 each at three-digit level - Only Section I for small MS (Div. 60 -64) - Only 64 for small MS Division 72: Computer and - 72 - 72 related activities Division 74: Other business - sum of 74.11 to 74.14 - 74 activities - sum of 74.2, 74.3 - 74.4 to 74.8 each at three-digit - Only 74 for small MS However, the STS Council Regulation does not cover the entire Section J (financial intermediation), Division 70 (real estate activities), Division 71 (renting activities), Division 73 (research and development) as well as all activities beyond NACE Division 74 that deal with overwhelmingly public services). 2 Short-term Statistics on services for the Euro Area by Henning Ahnert and Stefano Nardelli; parallel paper submitted to the Eurostat Seminar on short-term service statistics. 3 Statistics in Focus: Short-term services statistics - Their future use in business cycle analysis, Eurostat 2001 eurostat 2 3. Preliminary analysis The study conducted in Eurostat in early 2001 compared the evolution of GDP with that of different service sectors. The following table gives an overview of the expected behaviour of service data series with respect to the cyclical movements and their correlation with GDP. The expected behaviour has been derived from the general knowledge of the different sectors. NACE Rev. 1 Expected business cycle observation Section G Distributive trades are likely to be sensitive to the business cycle. Motor trade probably reacts most to cyclical fluctuations, whilst wholesale and retail trade are more likely to react in a smoother way. Section H Turnover of hotels and restaurants is expected to rise as the economy does, due to more consumer spending and because businesses are more likely to send staff to visit clients, attend conferences and trade fairs and so on. In times of recession, turnover of hotels and restaurants will probably contract as well. Section I Transport activities are likely to be connected to the business cycle.